Interview with co-founders of venture capital firm Fiat Ventures and sister company Fiat Growth
in all Roughly one-fifth of venture capital funding invested by 2021 will go to fintech.But that boom now appears to be over, as global fintech funding activity return to pre-2021 levels.
To make matters worse, fintech Didn’t escape the latest wave of tech layoffsBig names like Brex, Chime, and Stripe have made headlines over the past few weeks for this depressing reason.
However, fintech startups are still being founded and receiving funding this year. Of the 223 companies in Y Combinator’s summer 2022 cohort, 79 Fall more or less Enter the fintech category.
Why are founders and investors still betting on fintech, and where?To find out more, we reached out to the fintech-focused venture capital firm Fiat Ventures.
co-founder of fiat alex harris, Drew Gloverand marcos fernandez also runs its sister arm, fiat growth, a growth advisory firm that works with fintech and insurtech clients. This allows them not only to comment on industry trends from an investor perspective, but also to share practical advice.
One of their key recommendations was for fintech startups to take advantage of customer acquisition channels that are less variable or less seasonal than other channels, but our exchange covered a wider range of topics, from financial inclusion to offline channels and so on. continue reading:
Editor’s note: This interview has been edited for length and clarity. Many affiliates are Fiat Ventures portfolio companies or customers of Fiat Growth.
TC: What makes you Say “Fintech acquisition channels are too complex”?
alex harris: Fintech products have complex acquisition channels and registration processes by their nature. Some complications are unavoidable in a highly regulated environment, but redundant ones can arise if rigorous testing is not performed and the funnel includes unnecessary bloat.
Even the smallest details create friction. For example, as part of the know-your-customer (KYC) process, many fintech companies will ask customers to provide their entire social security number. In most cases, for non-credit products, only the last four digits of the SSN are required for identification. While only a five-figure difference, this can have a meaningful impact on conversion rates, resulting in significant savings at scale.
Data is king, of course, but there is a time and a place for data collection and personalization. Many times, a well-meaning data team will ask personalization and demographic questions directly during the registration process. However, these questions often pop up in post-signup surveys or periodically throughout a customer’s lifecycle. These issues need to be considered even after registration. Too often we see data being collected for its own sake, without actionable insights being drawn from it.